1. Field of the Invention
The present invention relates generally to data processing systems and, in particular, to banking services pricing.
2. Discussion of Related Art
Today, most financial products are commodities and their markets are competitive. New competition can also come from new products, new services, lower prices, the introduction of Real Time Gross Settlement (RTGS), the use of the Internet, mergers, acquisitions, and the shift towards greater reliance on bank fees and charges in place of higher interest margins and in place of cross subsidies between products. Pricing is often a major force in the decision making process for the customers in deciding which financial products or services to use. Therefore, a financial services company (FSC) needs a strategy and an infrastructure to manage its pricing strategies and to manage pricing changes in the most effective way. In many markets, the capability to manage pricing strategies better than the competition can be the competitive advantage.
Furthermore, fee arrangements change in value and structure in response to competitive situations. Fee arrangements can take many shapes, e.g., by product; by time of submission; by specified execution time; by window of time between submission and execution; by transaction value; by pre-assigned payment slots; and/or by some combination of these. In addition, customers are mobile and shop for the best deals. The methods of payment, timings of payment, cash management practices and credit requirements change. Also, competitors pricing strategies change. In response to these changes, FSCs need the ability to calculate pricing accordingly.
Therefore, FSCs not only need to be able to accurately measure the internal economics of the delivery of each product, the margin, the value of the customer relationship overall, and how those measures are changing. The FSCs also need the flexibility to perform relationship pricing by product or across products, taking special arrangements into consideration. In the same time, the FSCs need an infrastructure to keep up with the ever-changing market demands.